Goldman Sachs: China will be biggest threat to 2018 global economy

Baku. 21 November. REPORT.AZ/ "The global economy’s synchronized upswing should continue into 2018 but China’s plan to slow borrowing is a key uncertainty".

Report informs, chief Asia-Pacific economist for Goldman Sachs Group Inc. Andrew Tilton said in an interview with Bloomberg.

"We’re pretty optimistic about the year ahead", Tilton said in a Bloomberg Television interview. "We think we still have some room to grow in a lot of the world, and in Asia.", Tilton added.

But China’s plan to rein in financial risk is one of the biggest unknowns, Tilton said Tuesday. Authorities in Beijing have pledged to focus less on the pace of economic growth and instead shift the world’s second-largest economy to a more sustainable footing.

"That’s one of the key debates," Tilton said. "The pace at which they decide to move and their ability to implement that gradually is really the key for 2018. China is almost half the world’s investment, so managing that tightening in that area and that gradual investment slowdown is really key, not just for China but for the whole world."

Notably, China’s total debt will climb to 327 percent of gross domestic product by 2022, Bloomberg Economics researchers wrote in a report released Tuesday. Officials have ramped up warnings on the need to rein in debt. People’s Bank of China Governor Zhou Xiaochuan last month warned about the risk of a ‘Minsky moment,’ or a sudden collapse of asset values. China will try to eliminate all risks and will try not to let the assets fall sharply.